Germany braced for ‘Mietpreisbremse’ introduction this summer

Mietpreisbremse

The ‘rental brake’ puts an effective cap on the maximum permissible level of rent increase.

Now that the political squabbling over the coalition agreement between the SPD and Angela Merkel’s CDU/CSU alliance has been settled (for now), the responsible ministers are now tackling the legislation for introducing the Mietpreisbremse, or ‘rental brake’ which puts an effective cap on the maximum permissible level of rent increase. It looks increasingly likely that the new law will be in place by this coming summer.

Federal housing & environment minister Barbara Hendricks (SPD) and justice minister Heiko Maas (also SPD) have both seemingly made it a priority within their departments to get the legal framework up and running as soon as possible, “hopefully by this summer”, Hendricks said to the newspaper Tagesspiegel am Sonntag. The sixteen federal states would then have until 2015 to decide which of their localities would be affected by the regulations, which aim to keep rental increases in line with a local rent table, and to limit the amount of charges for energy-saving improvements which can be loaded on to tenants’s rents.

Germany’s tenants associations have been quick to welcome the politicians’ commitment to quickly enact laws which they see as overdue for the protection of tenants’ rights, and the provision of sustainably affordable housing. The Deutsche Mieterbund (German Tenants Association) commented that “the planned changes are overdue and urgently necessary”.

Independent of the imminent ‘Mietpreisbremse’ for new lease agreements, Germany’s individual federal states have also been granted the right in 2013 legislation to prevent existing lease agreements from rising above 15% over a three-year period, in contrast to the normally prevailing 20%. A number of states, including Bavaria, Hamburg and Berlin have already started imposing this law, with North Rhine-Westphalia set to follow suit in 59 identified municipalities across the state which have recognisable housing shortages.